Can 17,000 patents help Android win a legal Cold War?

Google is right when it says Android is under assault by rivals waving patents …

"Patent lawsuit filed against Android" has become a distressingly familiar headline for Google and its hardware partners. With Microsoft signing license agreements covering more than 50 percent of Android phones, Apple working the courts to block sales of HTC and Samsung devices, and various lawsuits launched by rivals from Oracle to BT, the Android mobile operating system is stumbling through a legal minefield.

It's fair to complain that the patent system itself is broken, as we've done on numerous occasions. Google has publicly bemoaned what it calls "a hostile, organized campaign against Android by Microsoft, Oracle, Apple and other companies, waged through bogus patents." But expecting the patent system to change overnight is a "pipe dream," says Michael Carrier, an antitrust scholar at Rutgers-Camden. This stark reality requires each company entering the mobile market to prepare for all-out war, and legal experts we've interviewed agree that Google failed to adequately protect Android from legal attack. Google declined to provide a comment or interview for this story.

There is basically no way to build a smartphone that doesn't infringe on someone else's patents, either knowingly or unknowingly, because there are simply too many of them, intellectual property experts say. What a company must do is prevent any obvious infringements in areas that are essential to the platform's functionality, and amass a patent portfolio so large that lawsuits can be met with something more than empty words. "Basically it's all-out war and you come to the war with your stacks of patents, and Google didn't have as much as the other companies. That's why it's being hurt today," Carrier said.

With Android becoming mainstream before Google amassed enough patents to protect it, the company tried to solve the problem by waving money at it. Google's attempts to buy the patent portfolio from bankrupt Nortel failed, with a consortium including Apple, Microsoft, and RIM putting together the winning package of $4.5 billion. Stymied, Google decided to buy Motorola Mobility and its portfolio of 17,000 patents worldwide, for a premium price of $12.5 billion.

Mutually assured destruction: the patent Cold War

If Google had prepared for the coming patent storm, "they could have bought themselves a patent portfolio for much less than they paid Motorola," said New York Law School Professor James Grimmelmann, who wrote "Owning the stack: the legal war to control the smartphone platform" for Ars. The Motorola price tag was "the opposite of a fire sale price," he said. "It's the fire extinguisher in the middle of a blazing inferno price."

The acquisition is still pending regulatory approval in the US and Europe. Assuming it is completed, we'll find out if it's enough to help Google fend off Android's many rivals. While one fantastic patent could theoretically do the trick if it is infringed upon by all of your competitors, it's much safer to have a well-rounded portfolio that covers all the product's core functionality, said IP attorney Patrick Patras of Hinshaw & Culbertson LLP in Chicago, who has represented Hitachi and others in patent lawsuits. The Motorola portfolio has at least 18 key patents for Google, covering location services, antenna designs, e-mail transmission, touchscreen motions, application management, and 3G wireless, Bloomberg reported at the time of the Motorola announcement, quoting patent lawyer David Mixon.

"You always hear these analogies about the Cold War and stockpiling all your nuclear weapons," Patras said. "A lot of times just the sheer volume of patents [is] sufficient to deter someone from filing suit against you. When you have the potential to get a court order that will exclude a competitor's product from the marketplace, that is a very powerful thing. Apple and Microsoft both had lots of patents that could potentially do that with respect to the Android products. And unless and until Google is in a position where they have patents to raise those same threats, there's no reason for Apple and Microsoft to back off. They're either going to get the products excluded or they're going to get damages and/or royalties going forward."

Certainly, much of this has already happened, with Google's hardware partners bearing most of the burden. Microsoft has boasted signing license agreements with the manufacturers of more than half of Android devices by revenue and unit share, including Samsung and HTC. These types of deals, reported to cost manufacturers anywhere from $5 to $15 per device in licensing fees, could drive up the price consumers pay for Android phones. Barnes & Noble claims Microsoft is demanding licensing fees for the Nook tablet that are equal or greater to the cost of the entire Windows Phone operating system.

Rulings go against Android

Even more threatening, perhaps, is the specter of rulings preventing Android phones and tablets from either being sold or using certain types of functionality. Just this week the International Trade Commission gave Microsoft a partial victory in claims that Motorola Android devices infringe on Microsoft patents. In a separate case the ITC ruled that several HTC smartphones infringe on an Apple patent and could be subject to an import ban starting in April 2012, although HTC can work around the ban by removing the feature, which turns phone numbers and addresses into clickable links that can either dial a number or perform a Maps search.

The HTC ruling is actually a positive one for Android, giving phone makers room to adjust software in ways preventing them from infringing on Apple claims, Ron Cass, a former vice-chairman of the ITC, said according to the Financial Times. “If I’m HTC—and particularly if I’m Google—I’m feeling a lot better today than if I’m Apple,” Cass said.

But there are other threats. Oracle is pushing for a January trial in its case against Google, which has dredged up an old e-mail written by Google mobile chief Andy Rubin seemingly acknowledging patent problems related to Android's use of Java. And British Telecom launched a new lawsuit on Monday of this week claiming Android and numerous other Google services infringe six of its patents. Another indirect threat from Apple involves the iPhone maker transferring patents to a company called Digitude Innovations, an alleged patent troll, which used them to sue various Android phone makers as well as Research in Motion.

Late to the patent game, Google strikes back

Google has gone on the offensive, handing patents over to HTC to help it in cases against Apple. But the key will likely be in Motorola's patent portfolio, when and if Google officially takes ownership of the company. "None of this will be positive for Android," Carrier said. "If enough of these lawsuits get through in which Android is found to infringe some of these patents, the question is what could Android do. If they could not design around the patents that could be a problem. My bet is Google is hoping that they can design around all these patents, but certainly the infringement cases are a concern."

In contrast to Google, Apple came to the smartphone market prepared for the patent war. After introducing the iPhone and its multitouch technology in 2007, the late Apple CEO Steve Jobs said, "And boy, have we patented it." Apple and Microsoft share a similar approach in patenting technology quickly and frequently, a more common strategy for commercial software than for open source software such as Android, Carrier notes.

But the use of open source software and a smart, defensive patent strategy are not mutually exclusive. Red Hat, in the enterprise server market, has shown that an open source company can publicly oppose the software patent system while building up a portfolio of its own, offering customers indemnification against lawsuits, settling with patent trolls when a fight wouldn't be worthwhile, and battling aggressively in other lawsuits when core issues are at stake.

The experts we spoke with agreed Google could have taken a page out of Red Hat's book. But Grimmelman thinks Google's rush into the smartphone market as an outsider "seeking to get to the front ranks" very quickly afforded it little time to build a defensive portfolio or negotiate cross-licensing deals to head off lawsuits. "In some ways it was kind of inevitable they would have to find a way to deal with the enormous patent space out there," he said.

17,000 patents may be enough, but damage is already being done

Patras believes the Motorola portfolio will put Google in good stead going forward, even if damage has been done to the Android ecosystem already. As long as Android lacks proper patent protection, Microsoft can demand licensing fees from hardware vendors. With a stronger patent portfolio, Google and partners could negotiate cross-licensing deals that don't require payments.

"In terms of sheer volume I think it's enough," Patras said. "There [are] 17,000 patents, one would think Google ought to be able to find a few in there that would cause Apple and Microsoft some pain. It's more a question of are they covering all the right areas, are there certain areas that are lacking. They should be in a pretty good place to get a cross-license deal with someone like Microsoft if that's what they chose to do."

Smartphones are relatively new, but will likely follow the path of more mature electronics industries, in which "you typically see large cross-licensing agreements between the big players because they've all got lots of patents the others are infringing," Patras said. "They could all sue one another, they could all get injunctions against one another, and then you end up with products that have technology that's 20 years old, and that's not in anyone's best interest."

Carrier is less certain Google will be able to avoid long-term harm to Android, even with the Motorola portfolio.

"The point of these lawsuits is to raise the price of Android so that it is no longer able to compete," he said. If Google and partners have to pay licensing fees, or change functionality due to infringement findings, "then all of a sudden Android is not as strong a competitor."

Carrier has one more scary thought on the litigation front, namely that "it's just getting started."

So much for companies believing in the free market and letting consumers decide. Now you can bring inferior products to market backed by thousands of crap patents that should never have been granted in the first place and that's enough to "compete".

With so many smart folks running around at Google you would think at least one would have seen this lawsuit shitstorm coming. But then I guess engineers are really more of the "just do it" type of people and not the "should it be done" type. Does Google not employ it's own lawyers or what?

So much for companies believing in the free market and letting consumers decide. Now you can bring inferior products to market backed by thousands of crap patents that should never have been granted in the first place and that's enough to "compete".

not sure if the problem is people copying crappy ideas that were patented. its the ideas that were good and patented people are wanting to use.

There is basically no way to build a smartphone that doesn't infringe on someone else's patents, either knowingly or unknowingly, because there are simply too many of them, intellectual property experts say. What a company must do is prevent any obvious infringements in areas that are essential to the platform's functionality, and amass a patent portfolio so large that lawsuits can be met with something more than empty words.

Or, a company can go out and license the patents it needs. Google had a chance to do this with the Nortel patents by joining the coalition, but declined.

So much for companies believing in the free market and letting consumers decide. Now you can bring inferior products to market backed by thousands of crap patents that should never have been granted in the first place and that's enough to "compete".

not sure if the problem is people copying crappy ideas that were patented. its the ideas that were good and patented people are wanting to use.

The "ideas" aren't crappy, the patents are.

Patents are like nuclear or biological weapons and need to be treated as such and not trivialized so much.

With so many smart folks running around at Google you would think at least one would have seen this lawsuit shitstorm coming. But then I guess engineers are really more of the "just do it" type of people and not the "should it be done" type. Does Google not employ it's own lawyers or what?

The evidence suggests Andy Rubin saw it coming with Java but decided to "do Java anyway and defend our decision, perhaps making enemies along the way.” It seems Google intentionally decided to walk into this mess and try to sort it out in court later.

Win? They will never win, someone will always be gunning for them for something. There is only so much that you can do to match offerings of others in the marketplace without stepping on some toes. The current 'smart phone' craze has, I think, just about reached its limit for "new and unique" things without treading very closely to, or into, the happy patent pile of someone else who will screm "Patent!!!" the second they get close.

What we need is a capped patent tax (say, 10% of the retail price of the device in question). Patent trolls can fight among themselves for that slice, but can't prevent anyone from bringing anything to market, even if the retail price happens to be $0.

What we need is a capped patent tax (say, 10% of the retail price of the device in question). Patent trolls can fight among themselves for that slice, but can't prevent anyone from bringing anything to market, even if the retail price happens to be $0.

In that case, drug companies (for example) will stop spending money to develop new products (e.g., drugs). When a company comes out with something good, somebody else will immediately release a generic version, sell it for the cost of production plus a small percentage (plus the 10% to the original developer) and the developer will never recover their R&D investment.

So much for companies believing in the free market and letting consumers decide. Now you can bring inferior products to market backed by thousands of crap patents that should never have been granted in the first place and that's enough to "compete".

With so many smart folks running around at Google you would think at least one would have seen this lawsuit shitstorm coming. But then I guess engineers are really more of the "just do it" type of people and not the "should it be done" type. Does Google not employ it's own lawyers or what?

Nobody can look at every patent, nor guess at whether a judge who has trouble working their VCR will broaden it well beyond common sense. And the lawyers and companies that don't want to actually compete rely on that.

What we need is a capped patent tax (say, 10% of the retail price of the device in question). Patent trolls can fight among themselves for that slice, but can't prevent anyone from bringing anything to market, even if the retail price happens to be $0.

What unique product has been blocked from entering the market by patent litigation?

Also, are you serious about the "even if the retail price happens to be $0" part? Even ignoring the obvious loopholes (i.e., give away the web service/printer/console and make money selling ads/printer cartridges/games), are you really saying that it's fine to steal IP as long as you give away what you steal?

At this point the only way forward for any company is to follow Apple's and Microsoft's lead and patent every piece of garbage that you can fool some patent examiner into letting you have. All you need is one clause in one patent to cause a company pain and if you patent enough garbage eventually you'll get something that will hold up, at least long enough to get a settlement or an injunction.

What we need is a capped patent tax (say, 10% of the retail price of the device in question). Patent trolls can fight among themselves for that slice, but can't prevent anyone from bringing anything to market, even if the retail price happens to be $0.

In that case, drug companies (for example) will stop spending money to develop new products (e.g., drugs). When a company comes out with something good, somebody else will immediately release a generic version, sell it for the cost of production plus a small percentage (plus the 10% to the original developer) and the developer will never recover their R&D investment.

Nobody is talking about drugs. And when they give us a new antibiotic, or something other than 1-per day goldmines to marginally help with chronic diseases, then they will get my sympathy. Until then we need to stop the tiny change = patent extending that they all do.

SW patents need to just go, or be radically reduced - you only get one granted if both Abrash and Carmack don't consider it 'obvious'...

Nobody can look at every patent, nor guess at whether a judge who has trouble working their VCR will broaden it well beyond common sense. And the lawyers and companies that don't want to actually compete rely on that.

True, plus each device can potentially infringe on many patents, making smartphones more complicated than things like pharmaceutical products, each of which may be covered by one or just a few patents.

This article is wildly cynical and proof positive that assigning normative blame to companies based on patents is foolish (for example claiming that someone 'stole' something from someone else. If you can't literally make a product at all without violating 1000 unknowable patents, then you cannot be blamed if infringement is found.)

It is safe to say that patents (software in particular) are completely broken and abusive at the moment. The question is what corporate behavior is laudable in that situation? If there are legal loopholes you can use to drive competitors out of business, even though they violate the letter and spirit of what the system is supposed to do, do you do it anyway? Do you walk into the broken store windows and take a TV during a riot? This is what Apple, Microsoft and Oracle (who basically bought Sun in order to profit from the lawsuit against Google) are doing. Or do you do what Google, Red Hat, and others do, and simply try to do business, get patents to try to protect yourself, and endure as best you can.

Obviously with counter-claims, etc., some of these entities are in litigation, and Samsung/Motorola are kind of in the middle, but the question to be asking is whether the company is USING/ ABUSING the broken system to try to get ahead, or simply trying to do business in spite of it. Picking and arguing over specific patents seems to be pointless, according to this article - its all garbage.

What we need is a capped patent tax (say, 10% of the retail price of the device in question). Patent trolls can fight among themselves for that slice, but can't prevent anyone from bringing anything to market, even if the retail price happens to be $0.

In that case, drug companies (for example) will stop spending money to develop new products (e.g., drugs). When a company comes out with something good, somebody else will immediately release a generic version, sell it for the cost of production plus a small percentage (plus the 10% to the original developer) and the developer will never recover their R&D investment.

Nobody is talking about drugs. And when they give us a new antibiotic, or something other than 1-per day goldmines to marginally help with chronic diseases, then they will get my sympathy. Until then we need to stop the tiny change = patent extending that they all do.

SW patents need to just go, or be radically reduced - you only get one granted if both Abrash and Carmack don't consider it 'obvious'...

Drugs patents are a special case (or maybe not since they don't get your "sympathy")? How do you propose to give companies a chance to recover their R&D investment if not by giving them the chance to charge extra for the results of their innovation for some limited time?

Also if you cared enough to notice, new antibiotics are introduced regularly.

"Free" was just an excellent way to bootstrap some real competition. I'm happy to pay an extra $5 to $15 or more for innovation. I'm just annoyed there aren't more cross licensing deals. Quit trying to kill your competition, and start trying to profit off of them. Quick settlements for reasonable fees, that's my New Year's wish for 2012.

How about this for a rule of thumb. Give the problem (related to the patent in question) to a group of CS 101 students. If at least one of them comes up with a solution that is the same as the patent, it is invalidated.

The issue here is that Google basically hung their OEM partners out to dry. Their ideological resistance to licensed technologies, and the apparently infringing approaches to get around these licensing requirements, is what has created the mess that Android is in. The smartphones themselves are where the battles now rage, yet Google makes hardly anything off of the smartphone sales. It's all about the Google services and other data mining tools provided with those smartphones that truly matter to them. They created a "free" OS, but did not indemnify their OEM partners. Basically, they figured that they would seed the market, and worry about the legal consequences later after Android becomes "too big to fail." With all of their defensive patent acquisitions and mergers, it seems now that it might have been cheaper to simply license some of these technologies that the OEMs now getting sued over.

"Free" was just an excellent way to bootstrap some real competition. I'm happy to pay an extra $5 to $15 or more for innovation. I'm just annoyed there aren't more cross licensing deals. Quit trying to kill your competition, and start trying to profit off of them. Quick settlements for reasonable fees, that's my New Year's wish for 2012.

"Free" (with a good distribution channel) was the strategy MS used to kill Netscape with IE. Once that did its work innovation stopped for several years since it was hard to compete with free. It would be interesting to know what would have happened if Netscape had been able to curtail IE or stay alive via licensing fees from MS.

Now Google is trying to kill the rest of the smartphone market in a similar manner to MS vs. Netscape, or at least subvert it to an ad based revenue model where Google excels. It's the same thing they're doing with email, maps, etc. However this time the newcomer is going up against established companies who are fighting back.

Google might have a compelling case to take to the supreme court that the current patent system is not constitutional.

The patent system must promote the progress of the useful arts (or some thing like that) ... and the current system is not close to doing that (at least in the computer/tech field)

The patent system is working as designed. We got innovation, phones today are practically unrecognizable from those of five or ten years ago. Now the innovators get a reward for a few years. You have to look at the big picture to see the pattern. Just because you don't see steady progress every six months doesn't mean there isn't progress overall.

Win? They will never win, someone will always be gunning for them for something. There is only so much that you can do to match offerings of others in the marketplace without stepping on some toes. The current 'smart phone' craze has, I think, just about reached its limit for "new and unique" things without treading very closely to, or into, the happy patent pile of someone else who will screm "Patent!!!" the second they get close.

So I start a new company, I innovate a great product that does something, "neat". I can't however afford the patent portfolios to protect myself from Microsoft and Mac suing over common sense ideas like, "An electronic device that does something neat."; Mac and Microsoft however can steal my "neat" idea, incorporate it into their product and market it, and the burden of proof falls on me to show I made something "neat" to begin with and I have to somehow address the same issue in every country and nation in the world or they'll just market my product behind my back overseas. So even then, I can't market something "neat" myself because in all likelihood they will blackmail me into taking a cash settlement over making them discontinue sale of their own "neat" product or they will just force me out of the industry all together.

So in the words of C3PO, "New strategy, I think we should let the Wookie win."

I think the problem with Android is Google's business model. Making it free to OEMs sounds wonderfully altruistic, but what it does in practice is put a gun to the heads of Apple, RIM, and Microsoft. Apple and RIM have to spend far more on software R&D than do their competitors, which puts them at a significant long term disadvantage. Similarly, Microsoft's per unit licensing business model is directly undermined, giving Android a competitive advantage. (In other markets and other times this has been considered unfairly leveraging a dominant position to enter new markets.)

Now matter how you feel about Google and Android, it is hard to be surprised at Google's competitors for reacting in such a strong way.

So I start a new company, I innovate a great product that does something, "neat". I can't however afford the patent portfolios to protect myself from Microsoft and Mac suing over common sense ideas like, "An electronic device that does something neat."

The fact that you can't afford the patent filing process though isn't Microsoft or Apple's problem. Go raise more capital and patent it.

Or, you can release it and claim prior art.

The more important thing is that you cannot infringe on the patents of others. If you simply can't file, then no one can effectively chase you for it (but others can "take" your idea). If you infringe, then you might be liable for infringement.

How do you propose to give companies a chance to recover their R&D investment if not by giving them the chance to charge extra for the results of their innovation for some limited time?

Also if you cared enough to notice, new antibiotics are introduced regularly.

They get the profits for having their product on the market until it's pirated. It might be a short honeymoon or maybe it takes years for a rival to study, decide to pirate, reverse engineer, produce, and then bring it to market. And there's the risk that whatever the product was has already been made obsolete by the next iteration.

The idea that markets freeze up absent a patent system does not hold up to real world observation. Whether or not markets are hamstrung in an uncertain litigious age of patent war we're about to find out. Me thinks the big losers will be consumers and shareholders, and the big winners will be the lawyers.

Looking at the timeline of antibiotics, it looks like one antibiotic every 3-7 years.

Making it free to OEMs sounds wonderfully altruistic, but what it does in practice is put a gun to the heads of Apple, RIM, and Microsoft.

People around here like to argue the various patent holders are being anti-competitive by trying to enforce their IP protections but you could easily turn that around and say Google is being anti-competitive by making the software "free" and trying to disrupt the market.

All this patent nonsense (ie, patenting the human genome, medical practices, software patents) is going to end up being the equivalent of the toxic debts that caused the banking and financial crash.

What happens to the Western World when all it's tech companies are in deadlock, with each other blocking each others products from being on sale due, quite frankly, pathetic patents that are blindingly obvious.

You can argue the merits for patents, but personally I see them nothing more than sub-prime financial bonds packaged up as AAA rated credit. It works for a while, but then, sooner or later, it's gonna crash.

And who is the one footing the bill, again, that's right, you and I.

Who are the ones making the money, again, that's right the lawyers.....

Google might have a compelling case to take to the supreme court that the current patent system is not constitutional.

The patent system must promote the progress of the useful arts (or some thing like that) ... and the current system is not close to doing that (at least in the computer/tech field)

The patent system is working as designed. We got innovation, phones today are practically unrecognizable from those of five or ten years ago. Now the innovators get a reward for a few years. You have to look at the big picture to see the pattern. Just because you don't see steady progress every six months doesn't mean there isn't progress overall.

If by "a few years" you mean "15 years" then you are correct.

The patent that Apple won the suit against HTC with is from 1996.

In technology years that's forever.

If software patents gave an entity exclusivity and a right to license the tech for 3 to 5 years and then it was free for all, I could support that.

The idea that markets freeze up absent a patent system does not hold up to real world observation.

I disagree and I think pharmaceutical R&D makes a good thought experiment. R&D costs are high, clinical trials are expensive and the rate of success is low. It's a very high risk investment, however once a drug is proven it's usually pretty cheap to reverse engineer and production costs are minimal. Currently the first-world tends to finance drug R&D for the entire world through higher health care costs, but if you remove that opportunity I believe you'll see drug R&D largely disappear.

Not all of this applies to other fields such as software development, but some of it certainly does, and there are counter examples. If IBM had been more competent and protected the IP in their original PC the way they did with the PS/2 the IT world might look much different. However what you're describing is a world where R&D investment moves away from technologies that are easy to copy and reproduce. The small inventor would be completely overshadowed by large companies. To get funding you'd need to show how your idea would be impossible to pirate.

This patent BS needs to stop. The patent system is auful and needs reform and hopefully these cell phone companies suing the crap out of each other will bring this to light. Steve Jobs deserves a lot of blame for intensifying this.

On a related but separate note, if Steve wanted to destroy Android I don't know why he didn't just lower the price of the iPhone. Apple is the only phone company that can drop prices to cost and still make a profit with their content. They have essentially done this in the tablet market and the result has been the complete failure of all Android devices.

The idea that markets freeze up absent a patent system does not hold up to real world observation.

I disagree and I think pharmaceutical R&D makes a good thought experiment. R&D costs are high, clinical trials are expensive and the rate of success is low. It's a very high risk investment, however once a drug is proven it's usually pretty cheap to reverse engineer and production costs are minimal. Currently the first-world tends to finance drug R&D for the entire world through higher health care costs, but if you remove that opportunity I believe you'll see drug R&D largely disappear.

Not all of this applies to other fields such as software development, but some of it certainly does, and there are counter examples. If IBM had been more competent and protected the IP in their original PC the way they did with the PS/2 the IT world might look much different. However what you're describing is a world where R&D investment moves away from technologies that are easy to copy and reproduce. The small inventor would be completely overshadowed by large companies. To get funding you'd need to show how your idea would be impossible to pirate.

I had to chuckle a bit at the bolded part, because that's exactly what the patent melee in the smartphone industry has done.